ALEX BRUMMER: Antony Jenkins' tough job to reboot damaged Barclays

Rushing to judgement on anything Barclays does is always a bit tricky. Before the ink is dry on the press release, some other nasty comes crawling out of the woodwork.

Indeed, the choice of Antony Jenkins as instant chief executive of the bank came less than 24 hours after the Serious Fraud Office let it be known that it was taking a close look at how Barclays raised money from Qatar in 2008.

In choosing Jenkins Barclays looks to have taken a small step in the right direction.

Big ask: New Barclays boss Antony Jenkins has a difficult job but he needs to prove he is worth his generous salary, says Alex Brummer

The new chief executive is a Barclays veteran who primarily has been involved in retail banking.

Far better to focus the future on the
bank’s traditional activities in serving households, small businesses
and corporations directly rather than the risk taking for which casino
bank BarCap is infamous.

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Another reason for approving of
Jenkins is that he is an internal appointment. When large companies have
to reach outside for leadership it is a sure sign that something is
structurally wrong. The succession at GlaxoSmithKline, Vodafone and
Tesco – three of the better FTSE100 outfits – were all settled in house.

It is wrong to think that only outsiders have the wisdom to affect change.

However, we should not think of
Jenkins as a white knight. Despite his efforts to separate himself from
the toxic legacy of payment protection insurance there is no escaping
the fact that mis-selling and subsequent obfuscation about its
significance took place on his watch.

Moreover, as a member of the bank’s
executive committee he can hardly have been unaware about the bad smell
surrounding interest rate swaps, even if the appalling practice of
selling a bad product to small businesses took place elsewhere in the
forest.

In his first round of interviews
Jenkins made it clear that he intends to run Barclays as a universal
bank where investment and utility banking sit side by side.

This is likely to be of some concern
to investors given that Jenkins has little experience of running
something as complicated as the largely American investment banking arm,
even though we are assured that veteran chairman Sir David Walker will
be capable of filling this gap.

As he undertakes his review (this is
the natural place for all new chiefs to start) Jenkins ought to consider
a more fundamental split and the eventual sale or flotation of former
boss Bob Diamond’s creation.

Investment banking may have produced
54 per cent of the income in the first half of 2012, but who can tell –
in such a black box – where the money came from. The typical response
when confronted with doing the splits is for banks to claim they need
the investment bank to provide corporate services from hedging to
foreign currency.

In much the same way as banks
outsource IT, catering, security and thousands of other services, so
they should be capable of doing the same for specialist investment
banking.

Jenkins makes much of the need to make Barclays the ‘go-to’ bank. But before that can happen he needs to do two things.

He must make an early start in
restoring the reputational damage caused by a series of scandals and
make sure that the bank’s solvency and liquidity are adequate to
withstand a tsunami in the eurozone.

It is a big ask, but he needs to prove he is worth his generous salary.

Gulf buddies

We have happily become used to the Qataris as the good guys rushing to the UK’s rescue when something goes wrong.

Whether it be keenly priced liquid
natural gas contacts, rescuing the Shard, the Olympic Park or the London
Stock Exchange, the Gulf statelet has been there for us. But Qatar is
not always warm and cuddly as we are now finding.

The SFO investigation into the Barclays deal could turn out to be as problematical as BAE’s dealings with Saudi.

And now Glencore is discovering that
its effort to buy up its mining cousin Xstrata, at what is perceived to
be a nepot-friendly price, is not going to wash in the Gulf state.

Glencore boss Ivan Glasenberg is in danger of ending up with egg on his face or walking away and paying out a big break fee.

But the strange thing is, he doesn’t appear to care a hoot.

Record breaker

Simon Fox gets some credit in the
City for guiding HMV towards the knackers yard in a civilised way when
he could, perhaps, have been running ITV.

But by making the jump from HMV to Trinity Mirror he is danger of making the same mistake twice.

After all, HMV’s digital strategy came far too late to save shareholders (including this writer) from suffering big losses.